Parent PLUS July 1st Deadline SOS!
By Terry Savage on June 01, 2026
Time is running out for Parent PLUS College loan borrowers to access money-saving repayment deals. The deadline is July 1st when reduced payment options disappear because of provisions in the OBBBA legislation.
If you miss the July 1st deadline, you will be forced into a standard, 10-year repayment plan with high monthly costs, instead of affordable income-based payments. Since there is no longer a cap on income to enroll in income-based repayment plans, almost every parent can save a small fortune by acting now.
And if the borrowing parent qualifies for Public Service Loan Forgiveness, those PLUS loans must also all be consolidated to access that program.
According to Rae Kaplan of FinancialRelief.com, a law firm specializing in student loans: “As a general rule, if your loan balance is greater than your annual income, you can expect to get a substantial amount of your loans forgiven under income-driven repayment.”
WARNING: You must never take out another Parent PLUS loan as it will taint all previous loans, and you will be put back into that standard 10-year repayment plan with its much higher monthly payments. If you have younger children, borrow privately for them.
For parents nearing retirement, consolidating all loans now preserves your right to apply for income-based payments later – when you might be retired and in a lower income bracket.
The Process to Lower Payments.
Step 1. You must CONSOLIDATE all of your Parent Plus loans by July 1st – and they must also be processed. Immediately go to StudentAid.gov and log in using your parental Federal Student Aid (FSA) user name and password. to review your Parent PLUS loans
On the home page, look for the box that says “Loan Repayment.” Then from the drop-down box, choose “Consolidate Loans.”
After confirming your personal information, click on the loans you want to consolidate – and make sure you click on ALL of them.
When asked to choose your repayment plan, simply click on STANDARD repayment. (The special deals come later!)
Then you’ll be asked to choose a “loan servicer.” Try to keep your current loan servicer to avoid delays, but if you have more than one servicer, choose Aidvantage, which is the primary source of consolidations.
The consolidated loan must remain in the name of the parent who originally took out the loan.
This consolidation must be completed and processed before July 1, 2026.
Step 2. After you receive an email from Aidvantage, acknowledging that your loans are consolidated, it’s time to apply for an Income Contingent Repayment plan.
This immediately puts your loan into administrative forbearance. Even if you receive a bill from your servicer, you don’t have to make that payment while your ICR is being processed. (That 60-day forbearance period also counts toward Public Service Loan Forgiveness.)
To find Income Contingent Repayment plans, log in again to StudentAid.gov, and once again, click on Repayment of Loans. Then scroll down to “Income Driven Repayments” and then choose “Income Contingent Repayment” from the menu.
Follow the prompts to apply for ICR, by either linking to last year’s tax return or submitting a recent pay stub. Note: if you scan your paystub, you must write on it the frequency of your paycheck – ie weekly, bi-monthly.)
If you filed a joint return, both incomes will be included. But you can check a box saying that although you are married filing jointly, you don’t have access to your spouse’s income. This will allow only your income to be considered.
Within two weeks you should get an acknowledgement by email that they received your ICR application. Within 30 days you should receive notice by email of approval, the payment amount, the payment date, and the servicer. In the meantime, you don’t have to make payments.
Step 3. Once you have been granted an Income Contingent Repayment plan, you should make the payment requested in the approval letter. But that’s not the end of this story!
Now, go back onto StudentAid.gov and apply to switch from an ICR to an Income-Based Repayment plan or IBR. That will further reduce your payment!
The IBR is based on a different formula, and it could lower even the ICR payment by as much as 50 percent!
For example, if you’re on the 10-year standard repayment plan for a $200,000 loan and your monthly payment is $3,000, the ICR plan alone could reduce it by 50% or more.
Then the IBR program will further reduce those payments by at least an additional 50%!
Thus, a $3,000 monthly payment could drop to around $700—depending on your individual circumstances.
After 25 years of on-time repayment of those new, lower payments, the balance will be forgiven! (The forgiveness of these loans may be considered taxable down the road.)
One more bonus: if you qualify for Public Service Loan Forgiveness, your remaining balance could be wiped out tax-free after 10 years (120 months) of that lower payment!
Consolidating Parent PLUS loans immediately could save you a fortune. And that’s The Savage Truth.
